Analysis that involves value judgments about economic policies is
A. microeconomics.
B. normative economics.
C. positive economics.
D. macroeconomics.
Answer: B
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That part of national income not spent on consumption is defined as
a. transitory income b. permanent income c. disposable income d. autonomous consumption e. saving
Suppose a firm has a Cobb-Douglas weekly production function Q = F(L, K) = 25L0.5K0.5, where L is the number of workers and K is units of capital. The wage rate is $900 per week, and a unit of capital costs $400 per week. Assuming no fixed costs, what is the firm's total cost of production if it uses least-cost input combination to produce 675 units of output?
A. $48,600 B. $43,650 C. $35,100 D. $32,400
Suppose a new technology allows firms to substitute mechanical flower pickers for farm laborers. As a result, the demand curve for farm laborers will
A) become less elastic. B) become more elastic. C) shift to the right. D) not be affected.
If the MPM is 0.4, then a $2,000 increase in income will
A. increase imports by $800. B. increase exports by $5,000. C. increase imports by $5,000. D. increase exports by $800.